Europe

Banca Monte dei Paschi di Siena (BMPS) could soon become the fourth bank to issue conditional pass-through covered bonds. It has announced a consent solicitation to amend the maturity structure of its existing soft bullet covered bond programme, which according to Moody’s will result in a rating upgrade.

Latvenergo, a state-owned Latvian electricity company, opened books on a sub-benchmark sized green bond on Wednesday morning — its first ever international bond deal and Latvia's first green bond.

Banco Sabadell was right to approach its possible 10 year covered bond with caution. But if it had been serious about the longer tranche, it would have shown the market a representative spread.

Yorkshire Building Society mandated leads for a roadshow on Wednesday to market a euro denominated benchmark, the issuer’s first in a year. Only two UK borrowers have launched euro benchmarks this year and bankers say a €500m deal with an intermediate maturity should have a good chance of success.

ABN Amro priced the first FIG senior green bond in euros on Tuesday in less than favourable market conditions. But the borrower did not pay up to go green.

Muenchener Hypothekenbank returned to covered bonds for the second time this year to fill out its curve with an eight year deal. The bond size was increased following strong demand, partly driven by the recent rise in Bund yields.

Henrik Stille, covered bond portfolio manager at Nordea Investment Management in Copenhagen talks to The Cover about the fixed income rout, the rates outlook, what it means for covered bonds and how he managed to beat the index and deliver a solid return.

Muenchener Hypothekenbank announced an eight year Pfandbrief on Monday afternoon but with several data points and public holidays this week, few others are likely to follow in euros. In addition, a shaky trade by Banco Sabadell on Friday has done little to instil confidence in peripheral issuers.

Muenchener Hypothekenbank has mandated banks for an eight year mortgage bond, its second Pfandbrief this year.

Shanks, the unrated UK waste management company with large operations in Belgium and the Netherlands, is offering its first green bond, targeting retail investors in Belgium and Luxembourg.

The last six months have turned the game of debt issuance on its head for German banks and their investors. In October the European Central Bank elbowed its way into the covered bond market as a buyer, building a portfolio that already sits at over €80bn and has pushed many German financial borrowers’ Pfandbrief spreads deeply negative. In March it upped the ante, starting a €60bn a month quantitative easing programme in European government bonds.

German companies have been — compared with most European peers — very well off for funding throughout the financial crisis. Blue chips issue bonds at tighter spreads than comparable companies in other countries. For the Mittelstand, Germany’s multilayered banking system — backed up by the unique Schuldschein market — means many firms are spoilt for choice when it comes to funding.